8 hour ca-dbo safe comprehensive - our industry today ...€¦ · includes the required 3 hours on...

RDH Education Services

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Presented by RDH Education Services

RDH Education Services can be contacted at: 4361 Technology Dr, Unit A, Livermore, CA 94551 877-734-4347 [email protected] www.rdheducation.com NMLS Approved Course Provider - ID number #1400385

8 Hour CA-DBO SAFE Comprehensive - Our Industry Today - TRID and Beyond Date of course content: 8/18/2015

Date of the course approval: 9/8/2015

Attachments:

1) NMLS Rules of Conduct

2) Syllabus


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Syllabus and Outline

8 Hour Classroom SAFE CE – # Industry Today-TRID and Beyond

Rules of Conduct for NMLS Approved Pre-Licensure (PE) and Continuing Education (CE) Courses

The Secure and Fair Enforcement for Mortgage Licensing Act (SAFE Act), requires that state-licensed MLOs complete pre-licensing (PE) and continuing education (CE) courses as a condition to be licensed. The SAFE Act also requires that all education completed as a condition for state licensure be NMLS approved. Since 2009 NMLS has established course design, approval, and delivery standards which NMLS approved course providers are required to meet. To further ensure students meet the education requirements of the SAFE Act, NMLS has established a Rules of Conduct (ROC). The ROC, which have been approved by the NMLS Mortgage Testing & Education Board, and the NMLS Policy Committee, both of which are comprised of state regulators, are intended to stress that NMLS approved education be delivered and completed with integrity.

Rules of Conduct As an individual completing either pre-licensure education (PE) or continuing education (CE), I agree to abide by the following rules of conduct: 1. I attest that I am the person who I say I am and that all my course registration information is accurate.

2. I acknowledge that I will be required to show a current government issued form of identification prior to, and during the course, and/or be required to answer questions that are intended to verify/validate my identity prior to, and during the course.

3. I understand that the SAFE Act and state laws require me to spend a specific amount of time in specific subject areas. Accordingly, I will not attempt to circumvent the requirements of any NMLS approved course.

4. I will not divulge my login ID or password or other login credential(s) to another individual for any online course.

5. I will not seek or attempt to seek outside assistance to complete the course.

6. I will not give or attempt to give assistance to any person who is registered to take an NMLS approved pre-licensure or continuing education course.

7. I will not engage in any conduct that creates a disturbance or interferes with the administration of the course or other students’ learning.


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8. I will not engage in any conduct that would be contrary to good character or reputation, or engage in any behavior that would cause the public to believe that I would not operate in the mortgage loan business lawfully, honestly or fairly.

9. I will not engage in any conduct that is dishonest, fraudulent, or would adversely impact the integrity of the course(s) I am completing and the conditions for which I am seeking licensure or renewal of licensure. I understand that NMLS approved course providers are not authorized by NMLS to grant exceptions to these rules and that I alone am responsible for my conduct under these rules. I also understand that these rules are in addition to whatever applicable rules my course provider may have. I understand that the course provider or others may report any alleged violations to NMLS and that NMLS may conduct an investigation into alleged violations and that it may report alleged violations to the state(s) in which I am seeking licensure or maintain licenses, or to other states. I further understand that the results of any investigation into my alleged violation(s) may subject me to disciplinary actions by the state(s) or the State Regulatory Registry (SRR), including removal of any course from my NMLS record, and/or denial or revocation of my license(s). _________________________ Course Number(s) ________________________________________ _________________ Signature Date (mm/dd/yyyy) ________________________________________ _________________ Print Name NMLS ID (If Known)


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Course Description and Purpose: Course ID 5588 This course covers SAFE Continuing Education Requirements for the California DBO and any state that does not require a state specific course or a number of hours above 8. Specifically, this course includes the required 3 Hours on Federal Law and Regulations, 2 Hours on Ethics, 2 Hours on Nontraditional Mortgages as well as 1 hour of CA DBO education. The modules included are: Federal Law - TRID and RESPA Section 8 In Federal Law, we will discuss the new integrated Truth in Lending/Real Estate Settlement Procedures Act Integrated Disclosures (TRID). We will review RESPA referrals and compliance with Section 8. For over 30 years the Truth in Lending Act and The Real Estate Procedures Act have required two different and separate disclosures to be delivered to consumers at various times in the transaction, the Good Faith Estimate (RESPA) and the Truth in Lending Statement (TILA). Section 1032(f) of the Dodd Frank Act mandated the creation of model disclosures that integrate the RESPA and TILA disclosures. We are going to explore in depth the requirements of these new disclosures. We will learn about and discuss the TRID Rule which combines four existing disclosures into two. The first is the Loan Estimate which replaces the GFE and TIL Statement and must be provided to the borrower no later than three business days after application. The second is the Closing Disclosure which replaces the HUD1 and HUD1A and must be delivered to the borrower at least three business days before consummation.

RESPA is a consumer disclosure and anti-kickback act. On the consumer disclosure side, the act requires lenders to provide buyers and sellers with full disclosure of the costs of the transaction.

RESPA is also an anti-kickback act. The idea here is to prevent the payment of kickbacks and other fees, which drive up the costs of the product to consumers. Section 8(a) of RESPA prohibits any person from giving or receiving a thing of value for the referral of settlement services in connection with federally related mortgage loans.


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Ethics Requirement - Ethics, Fair Lending and Fraud

This course explores several aspects of ethical mortgage lending. We will present a simple ethics framework for guiding individual decisions. We will discuss business ethics and how we structure our business “society” and therefore the laws that affect our business and our systems. We will review and discuss that ethics is how we act as individual practitioners and how we structure our policies. We will define and illustrate good ethical practices in the lending industry.

We will look at the Fair Housing Act and updates to disparate impact and discrimination actions. We discuss the critical integration between fair lending laws and ethical behavior.

Finally, we will look at recent fraud enforcement actions by the FBI and the IRS and reinforce the need to correct poor behaviors and prevent fraud and misrepresentation in order to protect the borrower.

Nontraditional Mortgages – ARMS and IO’s

We will cover several different types of mortgages and discuss their construction, their pros and cons, risks and ethical impacts. The mortgage types we will talk about include:

Adjustable rate mortgages (ARMs)

Interest Only mortgages (IOs)

Negative Amortization mortgages (‘NegAm’s)

Under the right economic environment, lending these mortgages to borrowers who can afford to take additional financial risks can lead to real savings for homebuyers. This is true considering the mortgages that allow borrowers to pay only the interest for a the first few years or have a more flexible payment options that tend to be lower than a 30-year fixed mortgage. It is important to consider that with this flexibility and these lower payment options, there is also the increased risk in the later years of the mortgage.

Following the financial crisis of 2008, studies and researched showed that too many mortgages were made to consumers without regard to the consumer’s ability to repay the loans. We will spend time talking about the Ability to Repay Rule and the Qualified Mortgage Rule.


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California Department of Business Oversight/ California Professionals Rulebook This course focuses on License Maintenance, the Powers of the Commissioner and the Attorney General, Required Conduct as well as the Homeowner’s Bill of Rights. We will discuss the CA Finance Lenders Law (CA Fin. Code §22000 - §22780) and the CA Residential Mortgage Lending Act (CA Fin. Code §50000 - §50706).

Presented by RDH Education Services

This is a live instructor led course. Your RDH Education instructor ________________ has many years experience teaching Mortgage and Real Estate professionals.

RDH Education Services can be contacted at: 4361 Technology Dr, Unit A, Livermore, CA 94551 877-734-4347 [email protected] www.rdheducation.com NMLS Approved Course Provider - ID number #1400385

Course Learning Objectives Upon successful completion of this course you will have a strong understanding of the TRID Rule and its major requirements. You will have a detailed understanding of covered transactions, the two definitions of business days, accuracy and timing requirements. You should be able to understand the Loan Estimate and understand and articulate the requirements for all aspects from application to closing. You will also have a general understanding of the closing disclosure and what is required. You will also review Fair Lending Laws and apply those to the basics of ethical action that we introduce early in the course. You will have a review of how MLOs should view ethical action and what they can do to prevent missteps and discrimination and understand fraudulent actions. You will be able to explain the concepts behind adjustable rate mortgages and interest only loans, review some of the key ARM loan programs and be able to work with some of the “tools of the trade” when originating and adjustable rate or interest only loan. You will also know the basic tenets of licensing under the CA DBO, including renewal, maintenance, record keeping and more. You will understand the CA Homeowners Bill of Rights and the powers of the Commissioner.


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Course Materials The course materials consist of text and a slide presentation. Text is available online. Course Expectations

• Attendance is mandatory to receive course credit. • Be on time to class • Active participation is required in this course. Students are expected to be

actively engaged with the material, listen to and follow the directions of the Instructor, participate in group discussions and activities, and complete all student workbook activities as assigned.

• Students are expected to be respectful when interacting with the instructor and other students in the classroom and refrain from inappropriate language or derogatory comments.

• Cell phones should be on mute or turned off. • No computers, notebooks or pads turned on while class is in session. • Cell phones, computers, notebooks or pads should be off of the desk top. • Tape recorders are not permitted during class lecture sessions. • If you leave the classroom while class is in session you must leave your

attendance sheet with the proctor or instructor who will initial each time out and time in.

• Please turn in your attendance record at the end of class to receive your certificate of completion and your evaluation form.

Course Completion

Before your completion status can be transmitted to the Nationwide Mortgage Licensing System & Registry (NMLS), you are required to:

Spend the minimum required amount of time in the course.

Interact with the instructor, answer questions and participate in discussions.

Complete all the required activities.

You must participate in class discussions, role play and other activities in order to be counted as having completed the course

Students are required to participate in the end of course assessment case study that incorporates each topic.


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Course Evaluation

At the conclusion of the course, you will be asked to complete a Course Evaluation.

Thank you for letting us provide to you your continuing education. RDH Education Services


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Course Specifics

Logistics

Instructor

Location

Start Time

Instructor Email

[ _____________________________________________]

[ _____________________________________________]

[ _____________________________________________]

[ _____________________________________________]

Total Time This course is 8 credit hours

Section 1,

Federal Law – 150

The course materials will take 3 hours to complete, divided into:

o Introduction and Background (5 minutes) o Integrated Disclosures (10 minutes) o Covered Transactions o Record retention

o The Loan Estimate (50 minutes) o General Requirements o Early Estimates o Disclosure Timing o Intent to Proceed o Definition of Business Day o Accuracy Requirement o Limitation on Fees and Tolerances o Changed Circumstances o Restrictions on issuing a revised Loan Estimate before

consummation o TILA-RESPA Integrated Disclosure Matrix effective October 3,

2015

o A Page-by-Page Overview (20Minutes) o The Special Information Booklet (5 minutes) o The Closing Disclosure (35 minutes) o Closing Disclosure, A page by Page Overview o Definition of Consummation o Settlement Agent o Waiver of the three business-day waiting period o Revisions to the Closing Disclosure and Timing o More Information on the TRID Rule

o RESPA Section 8 review (20 minutes) o Recent Enforcement Actions

o End of Chapter Assessment (5 minutes)

Section 2, Ethics, Fair Lending, and Fraud 100

Break 50 minutes

The course materials will take 2 hours to complete, divided into:

o Introduction and Background (15 minutes) o Fair Lending and Discrimination (45 minutes) o Examples and Recent Actions by HUD o Disparate Impact

o “Your Home Loan Toolkit”: A Step-by-Step Guide


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(15minutes) o Mortgage Fraud (20 minutes) o Fraud Schemes and Recent Enforcement o Straw buyers o Foreclosure Rescue o Appraisal fraud

o Wire fraud and money laundering

End of Chapter assessment (5 minutes)

Section 3,

Nontraditional Mortgages 100

The course materials will take 2 hours to complete, divided into: o Introduction and Background (15 minutes)

o Dodd Frank and “Ability to Repay” (5 minutes)

o IO Mortgages (25 minutes)

o Negative Amortization Mortgage (15 minutes)

o Adjustable Rate Mortgage (ARM) (25 minutes)

o Cross Comparison (10 minutes)

o Alternate Mortgage Loan Summary (5 minutes)

Section 4, California DBO Mortgages 50

The course materials will take 1 hour to complete, divided into: o Introduction and Background (10 minutes)

o License Maintenance (15minutes)

o Power of the Commissioner and the Attorney (10 minutes)

o General/Required Conduct (5 minutes)

o Homeowners Bill of Rights (10 minutes)

Breaks 80 minutes

End of course assessment

15 minutes


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Outline

Federal Law – TRID RESPA Section 8

I. Introduction and background

II. The Integrated Disclosures A. Covered Transactions

B. Record Retention

III. The Loan Estimate

A. General Requirements B. Early Estimates C. Disclosure Timing D. Intent to Proceed E. Definition of Business Day F. Accuracy Requirement G. Limitation on Fees and Tolerances H. Changes Circumstances I. Restrictions on Issuing a Revised Loan Estimate Before Consummation J. TILA-RESPA Integrated Disclosure Matrix K. Page by Page Overview

i. Page 1 ii. Page 2

iii. Page 3

IV. Closing Disclosure A. Closing Disclosure, A page by Page Overview

B. Definition of Consummation

C. Settlement Agent

D. Waiver of the three business-day waiting period

E. Revisions to the Closing Disclosure and Timing

V. RESPA Section 8 Review

A. Recent Enforcement Actions


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Ethics

I. Introduction and Background

II. Fair Lending and Discrimination

A. Examples and Recent actions by HUD B. Disparate Impact

III. “Your Home Loan Toolkit”: A Step-By-Step guide

IV. Mortgage Fraud

A. Fraud Schemes and Recent Enforcement i. Straw buyers

ii. Foreclosure Rescue iii. Appraisal fraud

B. Wire fraud and money laundering

Nontraditional Mortgages

I. Introduction and Background

II. Dodd Frank and “Ability to Repay”

III. IO Mortgages

A. IO Mortgage Features B. IO Mortgage Pros and Cons C. IO Mortgage Potential Pitfalls D. IO Example

IV. Negative Amortization Mortgage

A. Definitions B. Negative Amortization Mortgage Features C. NegAm Mortgage Pros and Cons D. NegAm Example


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V. Adjustable Rate Mortgage (ARM)

a. ARM Mortgage Features

i. Index

ii. Margin

iii. Teaser Rates / Payment Shock

iv. Payment Caps

v. Adjustment Period

vi. Terms And Caps

vii. Carryovers/Negam

viii. Qualifying Rate

b. ARM Mortgage Refinance c. Benefits of ARMs d. ARM Mortgage Considerations e. Borrower Considerations f. ARM High/Low Interest Rate Examples g. Option Adjustable Rate Mortgage

VI. Cross Comparison

VII. Alternate Mortgage Loan Summary

California DBO Mortgages

I. License Maintenance A. Definitions

B. License Renewal

C. Educational Requirements

D. Record Keeping

E. Surety Bond

F. Surrender, Revocation or Suspension of License

II. Powers of the Commissioner and the Attorney General/Required Conduct

A. Definitions B. Powers of the Commissioner


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C. Powers of the Attorney General D. Required Conduct

III. Homeowners Bill of Rights

F. Applicability of the Law

1. Definitions

G. No Dual Tracking during Short Sale

H. Cancelling a Pending Trustee’s Sale

I. Single Point of Contact

J. No Dual Tracking during Loan Modification

K. No Late Fees or Application Fees

L. Additional Loan Modification Safeguards

M. Binding if Loan is Transferred

N. Review of Foreclosure Documents

O. Extending Initial Contact Requirements

P. Notifying Borrowers Before Notice of Default

Q. Notifying Borrowers After Notice of Default

R. Legal Remedies for borrowers

S. Lenders’ Standard of Care to Investors


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